Brown Unveils Plan To Exempt Transit Workers From Pension Reforms
On Wednesday, Gov. Jerry Brown (D) announced a proposal (AB 1222) that would exempt public transit workers from pension reforms implemented this year while a court determines whether the new rules apply to such workers, the Los Angeles Times reports (York, Los Angeles Times, 9/4).
The plan was introduced by Assembly members Roger Dickinson (D-Sacramento) and Richard Bloom (D-Santa Monica) (Ortiz, Sacramento Bee, 9/5).
In September 2012, Brown signed a bill (AB 340) that:
- Requires all current and future public workers at every level of government to pay at least 50% of their pension costs;
- Increases the retirement age by at least two years for future public workers; and
- Caps the amount of future public workers' salaries that can go toward their pensions at $110,000 for those participating in Social Security and $130,000 for those not participating in the program.
The law -- which took effect Jan. 1 -- applies to most public workers (California Healthline, 1/29).
However, Thomas Perez -- U.S. Labor Secretary -- earlier this year said that the state would lose federal funding if it subjects public transportation workers to the new pension rules.
On Wednesday, federal officials withdrew $54 million in funding for the Sacramento Regional Transit because of the pension reform law, prompting Brown to release the exemption plan (Sacramento Bee, 9/5).
Details of Exemption Plan
Under Brown's proposal, about $4.3 billion in pension funding would continue to be dispersed while the state challenges a 50-year-old federal law that bans states from reducing public transit workers' pension benefits.
The plan would exempt public transportation workers from the new rules through the end of this year, pending the outcome of the legal challenge (Los Angeles Times, 9/4).
In addition, the plan would create a $26 million state loan program for transit workers who lose federal funding (Sacramento Bee, 9/5).
Brown said the legislation would keep federal transit funds "flowing while allowing the state to defend in court our landmark pension reforms."
State lawmakers are expected to pass the measure next week, according to the Times.
Barry Broad -- a representative of the Teamsters, Machinists and the Amalgamated Transit Union -- said such groups "don't think that the governor's view has a very strong likelihood of prevailing" in court.
However, Joshua Shaw -- executive director of the California Transit Association -- praised Brown's plan, saying, "We applaud the governor for working to protect our federal funding while fighting to retain the fiscal management tool we were given" through the new pension rules (Los Angeles Times 9/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.